CALL Play Updates

Apple Inc. - AAPL - close: 169.45 change: +2.04 stop: 163.40

Excellent news! AAPL dipped as expected. Shares hit $164.83. We had a trigger to buy calls at $166.50. Traders bought the dip and the stock rallied almost $5.00 off its intraday lows. Now that our play is open our first target is $174.00. Our second target is $179.00. FYI: The P&F chart points to a $231 target.

AAPL did have some news today. The Wall Street Journal reported that AAPL was getting closer to selling its iPhone in the world's largest mobile phone market: China.

Chart:

Picked on   August 26 at $166.50 *(small positions 1/2 to 1/4)
Change since picked:      + 2.95
Earnings Date           10/21/09 (unconfirmed)
Average Daily Volume =        14 million  
Listed on August 25, 2009         


CF Industries - CF - close: 82.18 change: -0.53 stop: 79.75

The consolidation in shares of CF took on a bearish tone today. You can see a new trend of lower highs developing in the last couple of days.

Currently our plan is to buy calls on a breakout over resistance with a trigger to launch positions at $85.25. If triggered at $85.25 our stop loss is at $79.75 and our first target is $89.85. Our second target is $97.50. My time frame is four to six weeks. FYI: A breakout over $85.00 would produce a new triple-top breakout buy signal on the Point & Figure chart.

Trading note: Investors should note that Agrium (AGU) has been trying to buy CF for months. CF has been trying to buy Terra Industries (TRA) for months. Nobody is selling because they claim the offers don't fully value the company (a.k.a. it's not enough money). There is potential upside if AGU finally makes a high enough offer or someone else steps in. There is potential downside if CF makes too high a bid for TRA and the market thinks they overpaid. This M&A merger dance hasn't affected the stock much lately but it is a risk either direction.

Picked on   August xx at $ xx.xx <-- TRIGGER 85.25
Change since picked:      + 0.00
Earnings Date           10/27/09 (unconfirmed)
Average Daily Volume =       872 thousand 
Listed on August 24, 2009         


EOG Res. Inc. - EOG - close: 72.96 change: -1.02 stop: 69.90

Last night we got more aggressive about an entry point in EOG when we didn't have to. Previously the plan was to buy calls on a dip at $72.00 but we changed it to buy the bounce on Wednesday. Shares gapped open lower this morning at $73.25 (our new entry) and dipped to $72.00 before bouncing. I would still buy calls here at current levels. More conservative traders may want to wait for signs that the bounce has begun first. The plan was to trade small position sizes.

Our first target is $79.50. Our second target is $88.00. The daily chart is building an inverse H&S pattern that is forecasting a rally toward $100.

Picked on   August 26 at $ 73.25 /gap down entry point 
                               /listed at $73.98
Change since picked:      - 0.29
Earnings Date           11/03/09 (unconfirmed)
Average Daily Volume =       2.4 million  
Listed on August 22, 2009         


FISERV Inc. - FISV - close: 49.62 change: +0.16 stop: 46.60

I have been warning readers to expect a dip toward $48.50. That dip occurred today although the stock only hit $48.62. Traders quickly bought the dip ant FISV closed in positive territory. Our first target to take profit is at $52.50. I'm setting a second target to exit completely at $54.00.

Picked on   August 21 at $ 48.60 *triggered         
Change since picked:      + 1.02
Earnings Date           10/28/09 (unconfirmed)
Average Daily Volume =       1.5 million  
Listed on August 19, 2009         


Fluor Corp. - FLR - close: 54.09 change: +0.16 stop: 49.95

FLR spent the session trading sideways. Traders bought the dip near $53.25 about three times today. We've been expecting a dip back towards $52.50 but readers may want to launch new positions if FLR bounces from here. FLR has already hit our first target near $55.00. Our second and final target is $59.00.

Picked on   August 17 at $ 51.00 *triggered            
Change since picked:      + 3.09
                           /1st target exceeded @ 55.10 gap open (+8.0%)
Earnings Date           08/10/09 (confirmed)
Average Daily Volume =       2.4 million  
Listed on  July 25, 2009         


Flowserve - FLS - close: 88.50 change: -0.02 stop: 84.75

If you missed the entry point yesterday we got a better one today. FLS dipped to $85.50 before bouncing back to almost unchanged. I'm suggesting readers use the bounce as a new entry point to buy calls. More conservative traders can up their stop toward today's low. Our first target is $92.25. Our second target is $98.50. Our time frame is several weeks.

Picked on   August 26 at $ 87.50  (1/2 pos)
Change since picked:      + 1.00
Earnings Date           10/28/09 (unconfirmed)
Average Daily Volume =       1.1 million  
Listed on August 17, 2009         


Genesse & Wyoming - GWR - close: 31.06 change: -0.25 stop: 27.75

GWR under performed its peers. The railroad index gained 0.6%. GWR lost 0.79%. Traders did buy the dip at $30.50. I wouldn't be surprised to see another dip closer to $30.00. I'm not suggesting new positions at this time. Our first target is $32.90. Our second target is $34.75.

FYI: The plan was to use small position sizes to limit our risk.

Picked on   August 15 at $ 28.66 /gap down entry
                               /originally listed at $29.30
Change since picked:      + 2.40
Earnings Date           11/03/09 (unconfirmed)
Average Daily Volume =       230 thousand
Listed on August 15, 2009         


Grainger W.W. - GWW - close: 88.93 change: -0.39 stop: 84.50

GWW is consolidating sideways in what looks like a bull-flag pattern. Currently our plan is to buy calls at $86.50. However, I am adding a breakout trigger to buy calls (small positions) at $90.50. Our first target is $93.50. Our second target is $97.50.

Picked on   August xx at $ xx.xx <-- TRIGGER @ 86.50 or 90.50
Change since picked:      + 0.00
Earnings Date           10/14/09 (unconfirmed)
Average Daily Volume =       635 thousand 
Listed on August 22, 2009         


Intl.Business Machines - IBM - cls: 119.43 change: -0.04 stop: 117.45

IBM under performed the major averages. Shares gapped open lower but traders bought the dip at $117.85. I am suggesting readers wait for a close over $120.00 or an intraday move over Monday's high before launching new call positions. Our first target is $124.50. Our second target is $129.00.

Picked on   August 24 at $120.25 
Change since picked:      - 0.82
Earnings Date           10/08/09 (unconfirmed)
Average Daily Volume =       7.9 million  
Listed on August 08, 2009         


IDEXX Labs - IDXX - close: 51.44 change: +0.38 stop: 49.75

Today marks three times in a row that IDXX has rallied to and failed at $52.00. Traders did buy the dip at $50.51. At this time I'd wait for a rise over $52.00 before buying calls.

Currently our first target to take profits is at $54.90. Our second target is $58.00.

Picked on   August 25 at $ 51.75 *small position sizes (1/2 to 1/4)
Change since picked:      - 0.31
Earnings Date           07/24/09 (confirmed)
Average Daily Volume =       383 thousand 
Listed on  July 25, 2009         


Legg Mason - LM - close: 29.08 change: +0.16 stop: varies

LM is inching closer and closer to a bullish breakout over resistance near $29.00-29.25. We have a trigger to buy the breakout.

Our aggressive trade is to buy calls with a trigger at $29.50 and a stop loss at $26.40 and we want to use small position sizes (1/2 to 1/4 normal size). More conservative traders could use a tighter stop loss. More aggressive traders can use a trigger at $29.25.

Our buy the dip trade is to open positions on a dip at $26.60 with a stop loss at $24.95. We want to trade small here as well. FYI: The P&F chart is bullish with a $39 target.

Picked on     July xx at $ xx.xx <-- TRIGGER 26.60 & 29.50
Change since picked:      + 0.00
Earnings Date           07/20/09 (confirmed)
Average Daily Volume =       3.4 million  
Listed on  July 25, 2009         


Lorillard Inc. - LO - close: 74.69 change: -1.59 stop: 73.25 *new*

The profit taking in LO continued on Thursday. Shares have now erased the big one-day rally. Furthermore the three-day decline looks like a bearish reversal following the breakout. I am not suggesting new positions at this time. More conservative traders may want to exit early right now given today's close under $75.00. Broken resistance at $75.00 should have been stronger support. I'm inching up our stop loss to $73.25. If you want to reduce your risk but don't want to exit yet then consider a stop closer to $74.00 instead. Our only target to take profits is at $79.90.

Picked on   August 24 at $ 75.75 *triggered   
Change since picked:      - 1.06
Earnings Date           07/27/09 (confirmed)
Average Daily Volume =       1.5 million  
Listed on August 01, 2009         


Mettler Toledo - MTD - close: 87.54 change: +0.25 stop: 84.99 *new*

Early this morning it looked like MTD was heading for our buy the dip trigger at $85.25. Bulls stepped in at $85.94 and the ensuing bounce pushed MTD to new highs for the year. The high for the day was $88.57. We happened to have a breakout trigger at $88.50 so the play is now open. The plan was to use very small position sizes about 1/4 our normal trade. I'm setting the stop loss at $84.99. Our first target is $93.50. Our second target is $99.00. I am labeling this an aggressive play because volume is pretty light for this stock.

Chart:

Picked on   August 27 at $ 88.50 *triggered  (1/4 normal size)
Change since picked:      + 0.00
Earnings Date           11/05/09 (unconfirmed)
Average Daily Volume =       234 thousand 
Listed on August 22, 2009         


Newmarket Corp. - NEU - close: 84.65 change: -0.40 stop: 79.00

NEU ran into some profit taking. Yet traders bought the dip near the 38.2% Fibonacci retracement of the current eight-day rally. This is probably an aggressive entry point to buy calls. However, I'm sticking to our plan to buy the second half of our position on a dip at $80.50.

Our first target to take profits is at $88.50. Our second and final target is $92.50.

Picked on   August 24 at $ 84.33 <- buy half now 8/24/09
                    /originally listed at $83.54, gapped higher @ 84.33
Change since picked:      + 0.32

Picked on   August xx at $ xx.xx <-- TRIGGER @ 80.50 for 2nd half
Change since picked:      + 0.00
Earnings Date           10/27/09 (unconfirmed)
Average Daily Volume =       141 thousand 
Listed on August 24, 2009         


Occidental Petrol. - OXY - close: 74.57 change: +0.41 stop: 69.45

Thankfully we didn't have to wait long for OXY to hit our trigger. The stock dipped to $71.87 this morning and rebounded sharply. Our trigger to buy calls was at $72.00. Our first target is $77.00. Our second target is $79.85.

Chart:

Picked on   August 27 at $ 72.00 *triggered         
Change since picked:      + 2.57
Earnings Date           10/28/09 (unconfirmed)
Average Daily Volume =       5.0 million  
Listed on August 26, 2009         


State Street (Bank) STT - close: 53.43 change: -0.04 stop: varies

STT came close to hitting our buy the dip entry point but didn't quite make it. More aggressive traders might want to consider jumping in on today's rebound. I'm suggesting we stick with the two strategies listed below.

We have an aggressive breakout trigger at $55.60 and we'll use a stop loss at $51.45. Our first target is $59.80. This is an aggressive entry so I'm suggesting smaller position sizes at least 1/2 to 1/4 our normal trade.

We also have a buy the dip entry point at $52.00 with a stop loss at $48.90. Our first target is $55.00. Our second target is $59.80. Currently the Point & Figure chart is bullish with a $62 target.

Picked on   August xx at $ xx.xx <-- TRIGGER 52.00 or 55.60
Change since picked:      + 0.00
Earnings Date           10/13/09 (unconfirmed)
Average Daily Volume =       5.3 million  
Listed on August 19, 2009         


U.S. Oil Fund - USO - close: 37.72 change: +0.77 stop: 33.99

Uh-oh! We may have missed the entry on USO. This oil ETF dipped to $36.16 and then rallied sharply off its lows near the 50-dma. We have a trigger to buy calls at $36.00. At this time we might want to jump in on a dip near $37.00. We'll see if there is any follow through higher tomorrow.

At the moment we'll stick to our plan to buy calls on the USO on a dip at $36.00. More conservative traders may want to wait for a dip closer to the trendline of higher lows and its 50-dma near $34.40. If triggered at $36.00 our first target to take profits is $39.75.

Picked on   August xx at $ xx.xx <-- TRIGGER @ 36.00 
Change since picked:      + 0.00
Earnings Date           00/00/00
Average Daily Volume =      11.5 million  
Listed on August 15, 2009         


PUT Play Updates

First Solar - FSLR - close: 125.88 chg: -0.87 stop: 141.50

FSLR spiked lower this morning but as the market turned higher shares trimmed their losses. I don't see any changes from my previous comments.

I would still expect a bounce toward the 10-dma and possibly $140. More conservative traders may want to exit early than endure that kind of volatility. I am not suggesting new bearish positions at this time. FSLR has already hit our first target at $122.50. Our second and final target is $111.00.

Picked on   August 17 at $135.88 *triggered/gap down entry
Change since picked:      -10.00
                               /1st target hit @ 122.50 (-9.8%)
Earnings Date           11/03/09 (unconfirmed)
Average Daily Volume =       3.5 million  
Listed on August 15, 2009         


Marvel Entertainment - MVL - close: 38.24 change: -0.37 stop: 39.05

Short-term it still looks like MVL is rolling over. Yet the stock found support near $38.00 and its 50-dma this afternoon. Look for a decline under today's low (37.98) as a new entry point for puts. Our target is $34.10.

Picked on   August 17 at $ 37.90 *triggered         
Change since picked:      + 0.34
Earnings Date           11/04/09 (unconfirmed)
Average Daily Volume =       710 thousand 
Listed on August 10, 2009         


Strangle & Spread Play Updates

(What is a strangle? It's when a trader buys an out-of-the-money (OTM) call and an OTM put on the same stock. The strategy is neutral. You do not care what direction the stock moves as long as the move is big enough to make your investment profitable.)

Research In Motion - RIMM - close: 73.63 chg: -1.20 stop: n/a

RIMM's decline today looks like a breakdown from its triangle pattern. The weakness may be due to news that AAPL is close to launching the iPhone in China. This might be our last chance to open strangle positions. Our suggested range was the $73.50-76.50 zone. The closer to $75.00 the better. The options suggested were the September $80 calls (RFY-IP) and the September $70 puts (RFY-UN). Our estimated cost was $2.64. We want to sell if either option hits $6.00 or higher.

Picked on   August 25 at $ 75.56
Change since picked:      - 1.93
Earnings Date           09/24/09 (confirmed)
Average Daily Volume =      11.7 million  
Listed on August 25, 2009         


Schlumberger - SLB - close: 56.90 change: +0.32 stop: n/a

Traders bought the dip in oil service stocks today. SLB gained 0.5%. I am not suggesting new strangle positions at this time.

The options we suggested were the September $60.00 calls (SLB-IL) and the September $45.00 puts (SLB-UI). Our estimated cost is $1.00 and we want to sell if either option hits $2.50 or higher.

Picked on   August 15 at $ 52.00 /gap down entry Aug. 17th
Change since picked:      + 4.90
Earnings Date           10/15/09 (unconfirmed)
Average Daily Volume =       9.2 million  
Listed on August 15, 2009         


CLOSED BEARISH PLAYS

Shanda Interactive - SNDA - close: 50.42 chg: +1.99 stop: 50.25 *new*

Whoa! Something happened around 10:00 o'clock that sent the stock soaring. I couldn't find any specific news but shares surged higher and eventually broke through the $50.00 level to hit our new stop loss. SNDA still faces some resistance near $51.00 but today's move could spark more short covering.

Chart:

Picked on   August 08 at $ 48.10 /gap higher entry
                               /originally listed at $47.83
Change since picked:      + 2.15<-- stopped @ 50.25 (+4.4%)
Earnings Date           09/01/09 (unconfirmed)
Average Daily Volume =       1.5 million  
Listed on August 08, 2009